7.  The first applicant was born in 1919 and lived in Sliven. The second and third applicants were born in 1937 and 1943 respectively and live in Sofia. On 30 September 2007 the first applicant died. On 3 February 2011 the second and third applicants who are the first applicant’s nieces and her only heirs expressed their wish to continue the proceedings before the Court on the first applicant’s behalf.
8.  The applicants’ ancestors owned a plot of land with three buildings constructed on it - a house, a summer kitchen and a storage building - in the village of Zheravna. The houses in the village are examples of traditional Bulgarian architecture and the village itself was declared an architectural reserve in 1964.
9.  In 1968 the plot and the buildings were expropriated for the needs of the State Tourist Agency. The applicants received pecuniary compensation.
10.  On 20 April 1992, following the entry into force of the 1992 Law (see relevant domestic law and practice below), the applicants made a request to the Mayor of Kotel for the restitution of the entire property, including the buildings. No response was received and on an unspecified date in 1993 the applicants appealed against the mayor’s tacit refusal to the Sliven Regional Court.
11.  In a judgment of 25 May 1993 the Regional Court rejected the appeal, finding that the property had been used for the purposes of the expropriation and therefore it was not subject to restitution. The applicants lodged a petition for review (cassation).
12.  In a final judgment of 28 March 1995 the Supreme Court held that the expropriation had been carried out under the building and planning legislation for the needs of the State Tourist Agency. It concluded that the conditions for restitution had been met since, as provided for by section 1 (1) of the 1992 Law (see paragraph 28 below), the construction project in view of which the properties were expropriated had not been carried out. Furthermore, even assuming that section 3 (1) of the 1992 Law was applicable, the court held that the condition for revoking the expropriation foreseen by that provision was also met in so far as the buildings were not used for the purposes for which they were expropriated. On these grounds it revoked the expropriation and restored the ownership of the property including the buildings on it to the applicants.
13.  On an unspecified date after October 1996 the Chairman of the Supreme Administrative Court lodged an application for the re-opening of the proceedings (at the end of 1996 the Supreme Court was divided into a Supreme Court of Cassation and a Supreme Administrative Court). He relied on a plan of the applicants’ plot issued by the Kotel municipality in October 1996, arguing that it constituted newly discovered evidence. On 10 May 1997 a five-member panel of the Supreme Administrative Court refused to re-open the case. The court found that the evidence relied upon was not newly discovered but had been issued by the Kotel municipality, which had been a party to the proceedings from their outset.
14.  Meanwhile, on 5 July 1996 the Mayor of Kotel, noting that the applicants had returned the compensation received by them, ordered that their properties be struck out of the State Property Register.
15.  After certain obstructions by the municipal administration and judicial proceedings in that respect, the applicants managed to obtain all the documentation necessary for acquiring a notary deed and obtained such on 7 December 1998. It related to both the land restored to the applicants and the buildings constructed on it.
16.  From that moment on the applicants paid property tax for the land and the buildings. Apparently, they did not take possession of the plot and the buildings.
17.  On an unspecified date in 1999 the Kotel municipality brought an action against the applicants seeking a declaration that it was the owner of the buildings restored to them. The municipality asserted that its ownership rights stemmed from an act issued on 12 October 1998 which had declared the impugned buildings to be municipal property.
18.  The applicants objected, claiming, inter alia, that the ownership issue had already been determined with res judicata effect by virtue of the final judgment of 28 March 1995. In a decision of 11 March 2000 the Kotel District Court dismissed this objection holding that the 1995 judgment did not have res judicata effect since it had been given in administrative proceedings and not in the course of ordinary civil proceedings where the parties could enjoy equality of arms. In a judgment of 13 March 2000 the Sliven Regional Court upheld the action, finding that the old buildings had been demolished and new ones had been erected in their place in 1982. Since the applicants could not establish ownership of the newly constructed buildings as of 1982, the court concluded that title to them could not be restored.
19.  On appeal, in a judgment of 6 October 2000, the Burgas Court of Appeal discontinued the proceedings as it found that the issue had already been determined with res judicata effect in the 1995 final judgment. The court found that both sets of proceedings had had the same subject matter. Further, the Kotel municipality had already exhausted the only remedy available to it – to lodge an application for re-opening of the administrative proceedings.
20.  The Kotel municipality appealed further. In a judgment of 19 April 2002 the Supreme Court of Cassation quashed the lower court’s judgment and remitted the case for fresh examination holding that the municipality was not bound by the res judicata effect of the 1995 judgment. It reasoned that the material scope of the declaratory proceedings had not been identical to that of the administrative proceedings which had ended with the 1995 judgment and that it had been the mayor, in exercise of his authority to decide on restitution claims, who had been a party to them. However, the Kotel municipality, which was vested with the municipal property rights and had authority to dispose of municipal property such as the one at issue, was a separate legal entity different from the mayor and had not taken part in the administrative proceedings which had ended with the 1995 judgment.
21.  Following the remittal, in a judgment of 4 February 2003 the Burgas Court of Appeal also held that the Kotel municipality was not bound by the res judicata effect of the 1995 judgment. It further held that the applicants’ property had been expropriated under section 101 of the Property Act and section 3 of the 1992 Law was therefore applicable (see paragraph 27 below). In that case, the court reasoned, the salient issue was not whether the expropriated buildings had been pulled down but rather whether the property had been used for the purposes for which it had been expropriated. The Court of Appeal held that this was not so as the buildings had not been used by the State Tourist Agency. Therefore, it quashed the Sliven Regional Court judgment and rejected the Kotel municipality’s claim.
22.  The municipality appealed. In a judgment of 27 January 2004 the Supreme Court of Cassation quashed the lower court’s judgment and found against the applicants. It re-examined the issue whether the applicants had had a right to restitution, holding that the final judgment of 1995 was not binding on the Supreme Court of Cassation which had the right to exercise indirect control over it in the declaratory proceedings.
23.  On an unspecified date the applicants requested the re-opening of the proceedings submitting new evidence – an expropriation order of the Council of Ministers of 1968, stating that a number of expropriated houses, including the applicants’, had to be, inter alia, restored, adapted and preserved as cultural monuments. On 21 December 2004 the Supreme Court of Cassation granted the request for re-opening holding that the order was of importance for the determination of the dispute as it could cast light on the legal grounds for the expropriation, and hence on the question whether the buildings had been rebuilt or not. It also found procedural violations in respect of the summoning of the applicants and remitted the case for fresh examination by a different panel of the Supreme Court of Cassation.
24.  In a final judgment of 11 April 2006 the Supreme Court of Cassation granted the Kotel municipality’s claim, declaring it the owner of the buildings in question and revoking the applicants’ notary deed of 1998 in that respect. Relying on the Council of Ministers’ order of 1968, it held that the property had been expropriated under section 101 of the Property Act. Therefore, it could be restored to the applicants only if the buildings were still standing and if the property was not used for the expropriation purposes. Relying on expert reports, the court established that the “adaptation, restoration and conservation” of the old buildings in fact constituted a new construction. Thus, the preconditions for restitution had not been met.
25.  In respect of the res judicata effect the court, referring to its judgment of 19 April 2002 (see paragraph 20 above), held that the proceedings which had ended with the judgment of 28 March 1995 were administrative and their subject matter had not been an ownership dispute. The municipality had been a third party to these proceedings as it had not taken part in them. The declaratory proceedings were civil and the municipality, being vested with the municipal property rights, was a party to them, whereas the mayor was merely its representative. Therefore, the municipality was not bound by the res judicata effect of the 1995 judgment in respect of the ownership dispute.
26.  It appears from a document issued by the Kotel Land Registry Service that on an unspecified date not later than September 2007 the applicants transferred the ownership of their plot of land to an individual called T. V., who sold it to his brother - P. V., in September 2007. In October 2007 the Kotel municipality sold, inter alia, the buildings which were the subject of the final judgment of 11 April 2006 to P. V. for an unspecified price. The applicants thus disposed only of the land which had been restored to them since pursuant to the 11 April 2006 judgment they were no longer owners of the buildings constructed on it.
27.  Further, according to a publication in the Bulgarian media dated 18 February 2008 two of the three buildings were destroyed by a fire earlier that month.